No. 16-341
In the
Supreme Court of the United States
TC HEARTLAND, LLC D/B/A HEARTLAND
FOOD PRODUCTS GROUP,
Petitioner,
v.
KRAFT FOODS GROUP BRANDS LLC,
Respondent.
On Writ of Certiorari to the United States
Court of A ppeals for the Federal Circuit
BRIEF FOR PETITIONER
John F. Duffy
Richard M. Koehl
Emma L. Baratta
Of Counsel
James W. Dabney
Counsel of Record
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
(212) 837-6803
[email protected]
Counsel for Petitioner
269992
i
QUESTION PRESENTED
The patent venue statute, 28 U.S.C. § 1400(b),
provides that patent infringement actions “may be
brought in the judicial district where the defendant
resides . . . .” The statute governing “[v]enue generally,” 28 U.S.C. § 1391, has long contained a subsection (c) that, where applicable, deems a corporate entity to reside in multiple judicial districts.
In Fourco Glass Co. v. Transmirra Products
Corp., 353 U.S. 222 (1957), this Court held that
§ 1400(b) is not to be supplemented by § 1391(c), and
that as applied to corporate entities, the phrase
“where the defendant resides” in § 1400(b) “mean[s]
the state of incorporation only.” Id. at 226. The
Court’s opinion concluded: “We hold that 28 U.S.C.
§ 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it
is not to be supplemented by the provisions of 28
U.S.C. § 1391(c).” Id. at 229.
Federal Circuit precedent holds to the contrary.
Although Congress has not amended § 1400(b) since
Fourco, the Federal Circuit has justified its departure from Fourco’s interpretation of § 1400(b) based
on amendments to § 1391(c). As stated in the decision below, Federal Circuit precedent holds that “the
definition of corporate residence in the general venue
statute, § 1391(c), applie[s] to the patent venue statute, 28 U.S.C. § 1400” (Pet. App. 4a) and that “Fourco was not and is not the prevailing law” (Pet. App.
8a) on where venue is proper in patent infringement
actions under § 1400(b).
The question presented in this case is thus precisely the same as the issue decided in Fourco:
Whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by
28 U.S.C. § 1391(c).
ii
RULE 29.6 STATEMENT
Petitioner states that its parent company is
Heartland Consumer Products Holdings LLC and no
publicly held company owns 10% or more of Petitioner’s stock.
iii
TABLE OF CONTENTS
Page
QUESTION PRESENTED..................................... i
RULE 29.6 STATEMENT ..................................... ii
OPINIONS BELOW .............................................. 1
JURISDICTION .................................................... 1
STATUTORY PROVISIONS INVOLVED ........... 1
STATEMENT OF THE CASE .............................. 1
A.
The Enactment of the Patent
Venue Statute and Its
Predecessors ........................................ 2
B.
The Circuit Split on Patent
Venue and This Court’s
Resolution in Fourco. .......................... 7
C.
Amendments to 28 U.S.C. §
1391 and the Federal
Circuit’s Reinterpretation of
28 U.S.C. § 1400(b). ...........................11
D.
Effects of the Federal
Circuit’s New
Reinterpretation of the
Patent Venue Statute. .......................14
E.
The Proceedings in this
Case. ...................................................16
SUMMARY OF THE ARGUMENT .....................19
iv
ARGUMENT ........................................................21
I. THE FEDERAL CIRCUIT
IMPROPERLY REJECTED THIS
COURT’S SETTLED
INTERPRETATION OF 28 U.S.C.
§ 1400(b). .........................................................21
A.
The Enactment and the
Original Meaning of the
Patent Venue Statute. .......................21
B.
This Court’s Interpretation
of the Patent Venue Statute
and the Federal Circuit’s
Revisionist Reinterpretation. ............24
C.
The Federal Circuit’s
Reinterpretation of § 1400(b)
Violates Multiple Canons of
Statutory Construction. .....................26
D.
The Federal Circuit’s
Reinterpretation of § 1400(b)
Undermines the Statutory
Structure. ...........................................31
E.
The Federal Circuit’s
Reinterpretation of § 1400(b)
Has Brought Back the Very
“Abuses” That Congress
Sought to Avoid. .................................37
II. UNDER THE CURRENT VERSION OF
§ 1391, FOURCO IS CLEARLY
CORRECT. ......................................................39
v
CONCLUSION .....................................................42
vi
TABLE OF AUTHORITIES
Cases ............................................................... Page(s)
Andrews v. Hovey,
124 U.S. 694 (1888) ........................................ 21, 41
Atl. Marine Constr. Co. v. U.S. Dist.
Court for W. Dist. of Tex.,
134 S. Ct. 568 (2013) ...................................... 18, 30
Beverly Hills Fan Co. v. Royal
Sovereign Corp.,
21 F.3d 1558 (Fed. Cir. 1994) ........................ 32, 35
Bilski v. Kappos,
561 U.S. 593 (2010) .............................................. 41
Bristol-Myers Squibb Co. v. Superior
Court of California, No. 16-466 ........................... 35
Brunette Mach. Works, Ltd. v. Kockum
Indus., Inc., 406 U.S. 706 (1972) ....... 10, 29, 36, 39
Carbice Corp. of Am. v. Am. Patents
Dev. Corp., 283 U.S. 27 (1931) ............................ 33
Commil USA, LLC v. Cisco Sys., Inc.,
135 S. Ct. 1920 (2015) .......................................... 34
In re Cordis Corp.,
769 F.2d 733 (Fed. Cir. 1985) .............................. 10
Cortez Byrd Chips, Inc. v. Bill Harbert
Constr. Co.,
529 U.S. 193 (2000) .................................. 30, 33, 39
vii
TABLE OF AUTHORITIES
CONT’D
Cases ............................................................... Page(s)
Fourco Glass Co. v. Transmirra
Products Corp.,
353 U.S. 222 (1957) ...................................... passim
Gen. Elec. Co. v. Marvel Rare Metals
Co., 287 U.S. 430 (1932)................................... 2, 36
Ginsberg & Sons v. Popkin,
285 U.S. 204 (1932) ................................................ 9
Goodyear Dunlop Tires Operations S.A.
v. Brown,
564 U.S. 915 (2011) .............................................. 35
Hazelquist v. Guchi Moochie Tackle Co.,
437 F.3d 1178 (Fed. Cir. 2006) ............................ 22
Hoffman v. Blaski,
363 U.S. 335 (1960) .............................................. 10
In re Keasbey & Mattison Co.,
160 U.S. 221 (1895) ................................................ 2
KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398 (2007) .............................................. 41
Limelight Networks, Inc. v. Akamai
Techs., Inc.,
134 S. Ct. 2111 (2014) .......................................... 41
MacEvoy Co. v. United States,
322 U.S. 102 (1944) .............................................. 10
viii
TABLE OF AUTHORITIES
CONT’D
Cases ............................................................... Page(s)
Midlantic Nat’l Bank v. N.J. Dep’t of
Envtl. Prot.,
474 U.S. 494 (1986) .............................................. 28
Morton v. Mancari,
417 U.S. 535 (1974) .............................................. 26
N. Am. Philips Corp. v. Am. Vending
Sales, Inc.,
35 F.3d 1576 (Fed. Cir. 1994) .............................. 34
Petrella v. Metro-Goldwyn-Mayer, Inc.,
134 S. Ct. 1962 (2014) .......................................... 22
Pure Oil Co. v. Suarez,
384 U.S. 202 (1966) ...................................... passim
Radzanower v. Touche Ross & Co.,
426 U.S. 148 (1976) ............................ 26, 27, 28, 39
Roberts v. Sea-Land Servs., Inc.,
132 S. Ct. 1350 (2012) .......................................... 33
Schnell v. Peter Eckrich & Sons, Inc.,
365 U.S. 260 (1961) ...................................... passim
Shaw v. Quincy Mining Co.,
145 U.S. 444 (1892) .................................... 4, 10, 23
Stonite Prods. Co. v. Melvin Lloyd Co.,
315 U.S. 561 (1942) ...................................... passim
ix
TABLE OF AUTHORITIES
CONT’D
Cases ............................................................... Page(s)
Transmirra Prods. Corp. v. Fourco
Glass Co.,
233 F.2d 885 (2d Cir. 1956), rev’d,
353 U.S. 222 (1957) .......................................... 8, 24
TRW Inc. v. Andrews,
534 U.S. 19 (2001) ................................................ 33
United States v. Freeman,
44 U.S. 556 (1845) ................................................ 32
VE Holding Corp. v. Johnson Gas
Appliance Co.,
917 F.2d 1574 (Fed. Cir. 1990) .................... passim
Walden v. Fiore,
134 S. Ct. 1115 (2014) .......................................... 35
Whitman v. Am. Trucking Ass’ns,
531 U.S. 457 (2001) .............................................. 31
Statutes and Rules
Delaware Code § 3104(c) ........................................... 34
28 U.S.C. § 109 (1940) ............................................. 5, 9
28 U.S.C. § 1254(1) ...................................................... 1
28 U.S.C. § 1338(a) ...................................................... 1
28 U.S.C. § 1391 ................................................ passim
x
TABLE OF AUTHORITIES
CONT’D
Statutes and Rules .......................................... Page(s)
28 U.S.C. § 1400 ................................................ passim
28 U.S.C. § 1406 ........................................................ 18
28 U.S.C. § 1651 ........................................................ 18
28 U.S.C. § 1694 ................................................ passim
35 U.S.C. § 103(a) ...................................................... 18
35 U.S.C. § 321 ......................................................... 30
Act of March 3, 1897, ch. 395, 29 Stat.
695 .......................................................................... 3
Federal Courts Jurisdiction and
Clarification Act of 2011, Pub. L. No.
112-63, § 202, 125 Stat. 758................................. 13
Federal Rule of Civil Procedure
4(k)(1)(A) .............................................................. 34
Jones Act, 46 U.S.C. § 688 ........................................ 12
Judicial Code of 1911, ch. 231, § 48, 36
Stat. 1087 ............................................................... 5
Judicial Improvements and Access to
Justice Act, Pub. L. No. 100-702,
§ 1013, 102 Stat. 4642 (1988) .............................. 11
xi
TABLE OF AUTHORITIES
CONT’D
Statutes and Rules .......................................... Page(s)
Leahy-Smith America Invents Act, Pub.
L. No. 112, § 18(c), 125 Stat. 284
(2011) .................................................................... 30
Securities Exchange Act of 1934, 42
Stat. 902, 15 U.S.C. § 78aa .................................. 27
Legislative and Administrative Proceedings
29 CONG. REC. 1900 (1897) .......................................... 5
H.R. REP. NO. 100-889 (1988) ....................... 11, 31, 39
H.R. REP. NO. 112-10 (2011) ..................................... 39
Treatises, Books, and Periodical Materials
Julie Creswell, So Small a Town, So
Many Patent Suits, N.Y. TIMES,
Sept. 24, 2006 ................................................. 14, 15
Matthew Sag, IP Litigation in U.S.
District Courts: 1999-2014, 101 IOWA
L. REV. 1065 (2016) .................................. 14, 15, 16
Brian Howard, Lex Machina 2015 Endof-Year Trends (Jan. 7, 2016),
available at
http://www.lexmachina.com/lexmachina-2015-end-of-year-trends ....................... 15
xii
TABLE OF AUTHORITIES
CONT’D
Treatises, Books, and Periodical Materials..... Page(s)
Chris Barry et al., 2016 Patent
Litigation Study: Are We at an
Inflection Point? (2016), available at
https://www.pwc.com/us/en/forensicservices/publications/assets/2016pwc-patent-litigation-study.pdf ........................... 16
Antonin Scalia & Bryan A. Garner,
Reading Law: The Interpretation of
Legal Texts (2012)................................................ 29
Theodore Sedgwick, The Interpretation
and Construction of Statutory and
Constitutional Law (2d ed. 1874). ....................... 27
1
OPINIONS BELOW
The opinion of the Court of Appeals is reported at
821 F.3d 1338 and is reproduced in Petition Appendix A. The opinions of the District Court are unreported and are reproduced in Petition Appendix B.
JURISDICTION
The final decision of the Court of Appeals was
entered on April 29, 2016. No petition for rehearing
was filed. On July 13, 2016, this Court extended Petitioner’s time to file a petition for a writ of certiorari
to and including September 12, 2016. On September
12, 2016, Petitioner timely filed a Petition for a Writ
of Certiorari, which this Court granted on December
14, 2016. This Court’s jurisdiction is invoked under
28 U.S.C. § 1254(1).
This civil action is one arising under federal patent law, over which the district court had subject
matter jurisdiction under 28 U.S.C. § 1338(a). The
Federal Circuit had appellate jurisdiction under the
All Writs Act, 28 U.S.C. § 1651(a).
STATUTORY PROVISIONS INVOLVED
28 U.S.C. § 1400(b) provides:
Any civil action for patent infringement may
be brought in the judicial district where the
defendant resides, or where the defendant
has committed acts of infringement and has
a regular and established place of business.
The full text of 28 U.S.C. § 1694 (concerning service of process in patent infringement actions) and
portions of the text of 28 U.S.C. § 1391 (“Venue generally”) are reproduced in Petition Appendix C.
STATEMENT OF THE CASE
The patent venue statute, 28 U.S.C. § 1400(b), is
part of a statutory scheme that “was designed ‘to define the exact jurisdiction of the . . . courts in these
matters,’ . . . and not to ‘dovetail with the general
[venue] provisions.’” Schnell v. Peter Eckrich &
2
Sons, Inc., 365 U.S. 260, 262 (1961) (quoting Stonite
Prods. Co. v. Melvin Lloyd Co., 315 U.S. 561, 565 &
n.5, 566 (1942)). The patent venue statute was enacted together with a provision for “service of process, summons or subpoena,” which enables a patentee to establish personal jurisdiction over, and obtain complete relief against, a defendant “[i]n a patent infringement action commenced in a district
where the defendant is not a resident but has a regular and established place of business.” 28 U.S.C.
§ 1694.
In Fourco Glass Co. v. Transmirra Products
Corp., 353 U.S. 222 (1957), this Court held that, as
applied to corporate entities, the phrase “where the
defendant resides” in § 1400(b) “mean[s] the state of
incorporation only,” id. at 226, and that the patent
venue statute “is not to be supplemented by the provisions of 28 U.S.C. § 1391(c).” Id. at 229. At issue
in this case is the propriety of the Federal Circuit’s
rejection of this Court’s longstanding construction of
§ 1400(b).
A. The Enactment of the Patent
Venue Statute and Its Predecessors
Congress has enacted versions of the patent venue statute three times:
(i) originally, in 1897;
(ii) in 1911, as part of a codification effort; and
(iii) in 1948, as part of the codification of title 28
of the United States Code.
Prior to 1897, “a suit for infringement might
have been maintained in any district in which jurisdiction of defendant could be obtained.” Gen. Elec.
Co. v. Marvel Rare Metals Co., 287 U.S. 430, 434
(1932). That result followed from precedents holding that patent infringement suits, being subject to
exclusive federal court jurisdiction, were “therefore
not affected by general provisions regulating the jurisdiction of the courts of the United States, concurrent with that of the several states.” In re Keasbey
3
& Mattison Co., 160 U.S. 221, 230 (1895) (emphasis
added).
In 1897, Congress changed the law by enacting a
statute containing only two sentences:
Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled, That in suits brought for
the infringement of letters patent the circuit
courts of the United States shall have jurisdiction, in law or in equity, in the district of
which the defendant is an inhabitant, or in
any district in which the defendant, whether a
person, partnership, or corporation, shall have
committed acts of infringement and have a
regular and established place of business. If
such suit is brought in a district of which the
defendant is not an inhabitant, but in which
such defendant has a regular and established
place of business, service of process, summons,
or subpoena upon the defendant may be made
by service upon the agent or agents engaged in
conducting such business in the district in
which suit is brought.
Act of March 3, 1897, ch. 395, 29 Stat. 695, 695–96
(the “1897 Act”).
This Court has described the restrictive intent of
the patent venue statute: “Congress adopted the predecessor to § 1400(b) as a special venue statute in
patent infringement actions to eliminate the ‘abuses
engendered’ by previous venue provisions allowing
such suits to be brought in any district in which the
defendant could be served.” Schnell, 365 U.S. at 262
(quoting Stonite, 315 U.S. at 563); accord Pure Oil
Co. v. Suarez, 384 U.S. 202, 207 (1966) (“The patent
infringement venue statute was enacted in 1897, 29
Stat. 695, specifically to narrow venue in such
suits.”).
The first sentence in the 1897 Act authorized patent infringement suits to be brought either “[i] in
the district of which the defendant is an inhabitant,
4
or [ii] in any district in which the defendant, whether
a person, partnership, or corporation, shall have
committed acts of infringement and have a regular
and established place of business.” Id. at 695 (emphasis and numerals added). The use of the singular
“the district” in referring to the defendant’s place of
inhabitance (contrasting with “any district” in referring to the defendant’s places of business) was consistent with the then-established meaning of “inhabitant” in statutes prescribing federal court jurisdiction and venue, for inhabitancy was considered as
being in one place even for corporations. See Shaw v.
Quincy Mining Co., 145 U.S. 444, 450 (1892) (“[T]he
domicil, the habitat, the residence, the citizenship of
the corporation can only be in the State by which it
was created, although it may do business in other
States whose laws permit it.”), cited in Fourco, 353
U.S. at 226.
By authorizing service of a “summons” on a defendant, the second sentence of the 1897 Act ensured
that plaintiffs in patent infringement actions could
establish personal jurisdiction over, and obtain complete relief against, any non-inhabitant person or entity that was subject to suit (i.e., subject to proper
venue) under the first sentence of the statute.
In 1911, the 1897 Act was re-enacted without
substantive change but with the outdated reference
to “circuit courts” in the first sentence changed to
“district courts,” as follows:
SEC. 48. In suits brought for the infringement
of letters patent the district courts of the
United States shall have jurisdiction, in law or
in equity, in the district of which the defendant is an inhabitant, or in any district in
which the defendant, whether a person, partnership, or corporation, shall have committed
acts of infringement and have a regular and
established place of business. If such suit is
brought in a district of which the defendant is
not an inhabitant, but in which such defendant has a regular and established place of
5
business, service of process, summons, or subpoena upon the defendant may be made by
service upon the agent or agents engaged in
conducting such business in the district in
which suit is brought.
Judicial Code of 1911, ch. 231, § 48, 36 Stat. 1087,
1100 (the “1911 Judicial Code”). Section 48 of the
1911 Judicial Code was later unofficially codified as
28 U.S.C. § 109 (1940).
This Court interpreted § 48 of the 1911 Judicial
Code in Stonite Prods. Co. v. Melvin Lloyd Co., 315
U.S. 561 (1942). The Stonite Court noted that the
1897 Act “was intended to define the exact limits of
venue in patent infringement suits” and “was a restrictive measure, limiting a prior, broader venue.”
Stonite, 315 U.S. at 566. “Congress did not intend
the Act of 1897 to dovetail with the general provisions relating to the venue of civil suits, but rather
that it alone should control venue in patent infringement proceedings.” Id. “The main purpose” of
the 1897 Act, according to its principal sponsor, was
“to give original jurisdiction to the court where a
permanent agency transacting the business is located, and that business is engaged in the infringement
of the patent rights of some one who has such rights
anywhere in the United States.” 29 CONG. REC. 1900
(1897) (statement of Rep. Lacey). “Isolated cases of
infringement would not confer this jurisdiction, but
only where a permanent agency is established.” Id.
The Stonite Court defined the relationship between the then-existing version of the patent venue
statute, § 48 of the 1911 Judicial Code, and more
general venue statutes. The Court held that § 48
was “the exclusive provision controlling venue in patent infringement proceedings,” 315 U.S. at 563, and
that a corporate defendant could not be sued for patent infringement in a district where venue was improper under § 48 even if venue might appear to be
proper under provisions in a general venue statute.
Id. at 563–67.
6
In 1948, Congress enacted title 28 of the United
States Code as positive law. See Act of June 25,
1948, ch. 646, 62 Stat. 869 (the “1948 Act”). As part
of that codification, the first and second sentences of
§ 48 of the 1911 Judicial Code were placed into separate sections of the new Code, 28 U.S.C. § 1400(b)
and § 1694, respectively.
After the 1948 codification, 28 U.S.C. § 1400(b)
provided (as it still provides):
Any civil action for patent infringement may
be brought in the judicial district where the
defendant resides, or where the defendant has
committed acts of infringement and has a regular and established place of business.
62 Stat. at 936.
28 U.S.C. § 1694 provided (as it still provides):
In a patent infringement action commenced in
a district where the defendant is not a resident but has a regular and established place of
business, service of process, summons or subpoena upon such defendant may be made upon
his agent or agents conducting such business.
62 Stat. at 945.
The revised sections use the words “resides” and
“resident” in place of the word “inhabitant,” which
was used in both sentences in the pre-codification
version. The Reviser’s Note to 28 U.S.C. § 1400(b)
(Supp. II 1949) states in part: “Words ‘inhabitant’
and ‘resident,’ as respects venue, are synonymous.”
The Reviser’s Note to § 1694 states: “Changes were
made in phraseology.” 28 U.S.C. § 1694 (Supp. II
1949). Congress has not altered the texts of 28
U.S.C. § 1400(b) or § 1694 since the 1948 codification.
7
B. The Circuit Split on Patent Venue
and This Court’s Resolution in Fourco.
The 1948 codified title 28 also included a new
§ 1391, headed “Venue generally,” whose full text
was:
§ 1391. Venue generally
(a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except
as otherwise provided by law, be brought only
in the judicial district where all plaintiffs or
all defendants reside.
(b) A civil action wherein jurisdiction is not
founded solely on diversity of citizenship may
be brought only in the judicial district where
all defendants reside, except as otherwise provided by law.
(c) A corporation may be sued in any judicial
district in which it is incorporated or licensed
to do business or is doing business, and such
judicial district shall be regarded as the residence of such corporation for venue purposes.
(d) An alien may be sued in any district.
62 Stat. at 935.
After the 1948 codification, a circuit split developed over whether the above-quoted provision in
§ 1391(c), “such judicial district shall be regarded as
the residence of such corporation for venue purposes”
(emphasis added), applied to the § 1400(b) provision,
“the judicial district where the defendant resides”
(emphasis added). See Fourco, 353 U.S. at 224 n.3.
In Fourco itself, the defendant was a West Virginia corporation that had a regular and established
place of business in the Southern District of New
York but had not committed acts of infringement
there. Id. at 223. Venue was thus not possible under
the second option provided in § 1400(b) (“where the
defendant has committed acts of infringement and
has a regular and established place of business”). Id.
8
Nevertheless, the plaintiff in the case argued that
venue was permissible under the first option in
§ 1400(b) (“where the defendant resides”) because the
defendant’s conducting of business in the Southern
District of New York made it one of the districts that
§ 1391(c) stated “shall be regarded as the residence
of such corporation for venue purposes.”
The District Court rejected the plaintiff’s theory
of venue, but the Second Circuit reversed. The Second Circuit characterized § 1391(c) as creating a
“definition” of “corporate residence” and reasoned
that § 1400(b) “requires but the insertion in it of the
definition of corporate residence from [§ 1391(c)] . . .
just as that definition is properly to be incorporated
into other sections of the venue chapter, e.g., §§ 1392,
1393, 1395, 1396, 1397, 1400, etc.” Transmirra
Prods. Corp. v. Fourco Glass Co., 233 F.2d 885, 886
(2d Cir. 1956), rev’d, 353 U.S. 222 (1957).
This Court granted review of the Second Circuit’s
decision to decide “whether 28 U.S.C. § 1400(b) is the
sole and exclusive provision governing venue in patent infringement actions, or whether that section is
supplemented by 28 U.S.C. § 1391(c).” 353 U.S. at
222. In answering that question, Fourco began with
the Court’s holding in Stonite that the immediate
predecessor of 28 U.S.C. § 1400(b) was “the exclusive
provision controlling venue in patent infringement
proceedings.” Id. at 225 (quoting Stonite, 315 U.S. at
563). Fourco characterized this holding as meaning
that § 48 of the 1911 Judicial Code was “complete,
independent and alone controlling in its sphere.” Id.
at 228. Fourco continued (Id. at 225):
The soundness of the Stonite case is not here
assailed, and, unless there has been a substantive change in what was § 48 of the Judicial Code at the time the Stonite case was decided, on March 9, 1942, it is evident that that
statute would still constitute “the exclusive
provision controlling venue in patent infringement proceedings.”
9
The Court considered (i) changes in the wording
of 28 U.S.C. §§ 1400(b) and 1694 as compared with
the corresponding text of § 48 of the 1911 Judicial
Code, id. at 226; (ii) the generality of the wording of
the text of 28 U.S.C. § 1391(c), id. at 228; (iii) contemporaneous congressional statements that “every
change made in the text is explained in detail in the
Revisers’ Notes,” id. at 226; (iv) “the fact that the Revisers’ Notes do not express any substantive change,”
id. at 227; and (v) “the fact that several of those having importantly to do with the revision say no change
is to be presumed unless clearly expressed,” id. at
227–28.
Based on all of those indicia of statutory meaning,
and with “no substantive change being otherwise apparent,” the Fourco Court concluded: “[W]e hold that
28 U.S.C. § 1400(b) made no substantive change
from 28 U.S.C. (1940 ed.) § 109 [§ 48 of the 1911 Judicial Code] as it stood and was dealt with in the
Stonite case.” Id. at 228. The Fourco Court then reiterated the continued vitality of its earlier interpretation of the patent venue statute, stating that
§ 1400(b) “is complete, independent and alone controlling in its sphere as was held in Stonite,” id. at
228, and that it was “not to be supplemented by the
provisions of 28 U.S.C. § 1391(c),” id. at 229. The final two paragraphs in the Fourco opinion were:
We think it is clear that § 1391(c) is a general corporation venue statute, whereas § 1400
(b) is a special venue statute applicable, specifically, to all defendants in a particular type of
actions, i.e., patent infringement actions. In
these circumstances the law is settled that
“However inclusive may be the general language of a statute, it ‘will not be held to apply
to a matter specifically dealt with in another
part of the same enactment. . . . Specific
terms prevail over the general in the same or
another statute which otherwise might be controlling.’ Ginsberg & Sons v. Popkin, 285 U.S.
10
204, 208.” MacEvoy Co. v. United States, 322
U.S. 102, 107.
We hold that 28 U.S.C. § 1400 (b) is the
sole and exclusive provision controlling venue
in patent infringement actions, and that it is
not to be supplemented by the provisions of 28
U.S.C. § 1391(c). The judgment of the Court of
Appeals must therefore be reversed and the
cause remanded for that court to pass upon
the District Court’s ruling that there had been
no showing of acts of infringement in the district of suit.
Id. at 228–29 (emphasis in original).
As construed in Fourco, the phrase, “the judicial
district where the defendant resides” (§ 1400(b)), denotes a defendant’s “domicile, and, in respect of corporations, mean[s] the state of incorporation only.”
Id. at 226 (emphasis in original; citing Shaw, 145
U.S. at 450); accord Brunette Mach. Works, Ltd. v.
Kockum Indus., Inc., 406 U.S. 706, 707 n.2 (1972)
(“[T]he residence of a corporation for purposes of
§ 1400(b) is its place of incorporation.”).
Fourco’s interpretation of § 1400(b) was accepted
and unquestioned law for more than three decades.
See, e.g., Pure Oil, 384 U.S. at 207 (“This Court in
Fourco, after determining that the 1948 revision of
§ 1400(b) was meant to introduce no substantive
change in the provision, was merely following the
purpose and letter of the original enactment.”);
Schnell, 365 U.S. at 262–64 (following Fourco and
affirming dismissal for improper venue); Hoffman v.
Blaski, 363 U.S. 335, 336–44 (1960) (affirming order
granting writ of mandamus directing transfer of patent infringement action); In re Cordis Corp., 769
F.2d 733, 736 (Fed. Cir. 1985) (“The Supreme Court
has held that § 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the
provisions of 28 U.S.C. § 1391(c), having to do with
general corporation venue.”).
11
C. Amendments to 28 U.S.C. § 1391 and the
Federal Circuit’s Reinterpretation of 28 U.S.C.
§ 1400(b).
Section § 1391(c) has been substantively amended
twice since this Court’s decision in Fourco—in 1988
and again in 2011.
In 1988, 28 U.S.C. § 1391(c) was revised as indicated below (emphasis added):
Pre-1988 Text of
§ 1391(c)
A corporation may be
sued in any judicial district in which it is incorporated or licensed to do
business or is doing
business, and such judicial district shall be regarded as the residence
of such corporation for
venue purposes.
1988 Text of § 1391(c)
(first sentence)
For purposes of venue
under this chapter, a
defendant that is a corporation
shall
be
deemed to reside in any
judicial
district
in
which it is subject to
personal jurisdiction at
the time the action is
commenced.
As shown above, before 1988, § 1391(c) had provided that certain districts would be “regarded as the
residence of such corporation for venue purposes”
(emphasis added), whereas in 1988, this sentence
was re-written to say that corporations would be
“deemed to reside” in certain districts “[f]or purposes
of venue under this chapter,” with “this chapter” referring to chapter 87, entitled “District Courts; Venue.” See Judicial Improvements and Access to Justice Act, Pub. L. No. 100-702, § 1013, 102 Stat. 4642,
4669 (1988) (the “1988 Act”).
The section of the 1988 Act which amended
§ 1391(c) was located in a “Miscellaneous Provisions”
title and characterized in a contemporaneous House
Report as being one of a series of “miscellaneous provisions dealing with relatively minor discrete proposals.” H.R. REP. NO. 100-889, at 66 (1988), as reprinted in 1988 U.S.C.C.A.N. 5982, 6027.
12
Soon after that 1988 amendment, the Federal
Circuit in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), concluded
that, due to the change in the wording of § 1391(c),
“the meaning of the term ‘resides’ in § 1400(b) has
changed.” Id. at 1575. Although the pre-1988 text of
§ 1391(c) (which applied “for venue purposes”) was
textually broader than the 1988 text (which facially
applied only “[f]or purposes of venue under this
chapter”), the Federal Circuit characterized the corporate “residence” clause of the pre-1988 text of
§ 1391(c) as “surplusage” or “at best confusing.” 917
F.2d at 1578. 1 The Federal Circuit thus characterized the issue before it as one “of first impression,” to
wit, what “the Congress now intends by this new
language in the venue act.” Id. at 1579 (emphasis in
original).
The VE Holding court placed significant weight
on the addition of the words “this chapter” in the
1988 amendment of § 1391(c), reasoning:
The phrase “this chapter” refers to chapter 87
of title 28, which encompasses §§ 1391-1412,
1
By the time of VE Holding, this Court in Pure Oil Co. v. Suarez, 384 U.S. 202 (1966), had already interpreted the pre-1988
version of § 1391(c) as “appl[ying] to all venue statutes using
residence as a criterion, at least in the absence of contrary restrictive indications in any such statute.” Id. at 204–05. (The
Pure Oil Court specifically cited § 1400(b) and Fourco to illustrate an example where “contrary restrictive indications” meant
that § 1391(c)’s definition should not be applied. See id. at 206–
07.) Pure Oil held that the “the broader residence definition of
[pre-1988] § 1391(c)” should be read into statutes such as the
Jones Act. While the relevant provision of the Jones Act, 46
U.S.C. § 688, is a “venue” provision and thus is textually within
the literal scope of the pre-1988 version of § 1391(c), it is outside the U.S. Code “chapter” referred to in the 1988 version of
§ 1391(c).
13
and thus includes § 1400(b). On its face,
§ 1391(c) clearly applies to § 1400(b), and thus
redefines the meaning of the term ‘resides’ in
that section.
Id. at 1578. The court viewed the phrase “[f]or purposes of venue under this chapter” as “exact and
classic language of incorporation,” id. at 1579, and
therefore held that “the general statute, § 1391(c),
expressly reads itself into the specific statute” and
“supplement[s] § 1400(b),” id. at 1580.
According to VE Holding, § 1400(b)’s phrase “the
judicial district where the defendant resides” was
changed in 1988 to mean “any district where there
would be personal jurisdiction over the corporate defendant.” Id. at 1583. The court defended that
change on the grounds (asserted to be “not in dispute”) that an era of “more liberalized venue law”
had made “the ‘freezing’ of patent venue as a result
of Fourco . . . an anomaly.” Id. at 1582–83.
In 2011, Congress completely rewrote 28 U.S.C.
§ 1391 and repealed the language (“For purposes of
venue under this chapter”) that the VE Holding court
had relied upon to justify its holding. See Federal
Courts Jurisdiction and Clarification Act of 2011,
Pub. L. No. 112-63, § 202, 125 Stat. 758, 763 (the
“2011 Act”). The new § 1391, which remains in force,
begins with a new subparagraph (a) addressing the
applicability of the entire section:
(A) APPLICABILITY OF SECTION.—Except as otherwise provided by law—
(1) this section shall govern the venue of all
civil actions brought in district courts of the
United States . . . .
28 U.S.C. § 1391(a)(1).
New § 1391(c) provides default definitions of residency for natural persons and corporations, with the
operative language for corporations reading:
(C) RESIDENCY.—For all venue purposes—
14
....
(2) an entity with the capacity to sue and be
sued in its common name under applicable
law, whether or not incorporated, shall be
deemed to reside, if a defendant, in any judicial district in which such defendant is subject
to the court’s personal jurisdiction with respect to the civil action in question and, if a
plaintiff, only in the judicial district in which
it maintains its principal place of business; …
28 U.S.C. § 1391(c)(2).
D. Effects of the Federal Circuit’s New Reinterpretation of the Patent Venue Statute.
The VE Holding reinterpretation of § 1400(b) led
to significant changes in where patent infringement
actions were brought. By 2005, a decade and a half
after VE Holding, 156 patent cases—or about 6% of
the 2612 patent cases filed in all federal districts
that year—were brought 2in one district court, the
Eastern District of Texas. The next year, the burgeoning number of patent cases in the Eastern District of Texas was considered sufficiently newsworthy
that it generated a feature story in The New York
Times, which commented on the district’s “red-hot
patent docket.” See Julie Creswell, So Small a Town,
So Many Patent Suits, N.Y. TIMES, Sept. 24, 2006,
http://www.nytimes.com/2006/09/24/business/24ward
.html. That article speculated that the patent docket
in the Eastern District of Texas “may not be able to
sustain its current pace of growth” because it was
2
Figures are drawn from Matthew Sag, IP Litigation in U.S.
District Courts: 1999-2014, 101 IOWA L. REV. 1065 (2016). See
id. at 1111 (setting forth the number of patent cases filed in certain district courts); id. at 1082 (setting forth the total number
of patent cases filed per year in table 3, columns 1 & 2).
15
“starting to attract so many cases that a certain
sluggishness may be setting in.” Id.
That prediction proved to be inaccurate. In 2006,
the year of the Times article, more than 9% of all patent cases in the country (256 of 27453 cases) were
filed in the Eastern District of Texas. Nine years
later, in 2015, more than 40% of all patent cases
were brought in that district, and more than 50% of
patent cases were filed in just two districts (E.D.
Tex. and D. Del.), as illustrated in the chart below
(Brian Howard, Lex Machina 2015 End-of-Year
Trends Fig. 3 (Jan. 7, 2016), available at
http://www.lexmachina.com/lex-machina-2015-endof-year-trends):
Multiple empirical studies suggest that the ongoing centralization of patent litigation in a few judi3
See Sag, supra note 2, 101 Iowa L. Rev. at 1082, 1111.
16
cial districts has been driven by forum shopping.
Professor Matthew Sag has published statistics
showing a “marked divergence between the rate of
patent litigation in the Eastern District of Texas and
the District of Delaware4 and other forms of IP litigation in these districts.” Professor Sag asserts: “The
reality is that these courts are not better in any value-neutral sense; they are simply better for
patent
plaintiffs and worse for patent defendants.” 5
PriceWaterhouseCoopers (“PWC”) publishes an
annual study of patent litigation trends and developments. PWC’s 2016 study presents patent case
statistics and states that “[c]ertain jurisdictions . . .
continue to be more favorable venues for patent
holders.” Chris Barry et al., 2016 Patent Litigation
Study: Are We at an Inflection Point? 15 (2016),
available at https://www.pwc.com/us/en/forensicservices/publications/assets/2016-pwc-patentlitigation-study.pdf (the “2016 PWC Study”). The
2016 PWC Study ranks patentee-favorable venues on
the basis of a simple average of each venue’s ranking
in three variables: “[i] shorter time-to-trial, [ii] higher success rates and [iii] greater median damages
awards.” Id. The PWC Study ranked the District of
Delaware and Eastern District of Texas as numbers
1 and 2, respectively, under those criteria. Those are
also the top two districts in terms of the number of
patent filings.
E. The Proceedings in this Case.
Petitioner is a limited liability company organized
and existing under the laws of Indiana. Petitioner is
not registered to do business in Delaware and does
not have any regular or established place of business
4
Sag, supra note 2, 101 Iowa L. Rev. at 1099.
5
Id. at 1104.
17
in Delaware. Petitioner develops and manufactures
zero calorie sweetener products in the greater Indianapolis area, both under its own brands and under
brands owned by third parties who contract with Petitioner to perform manufacturing activity for them.
Among Petitioner’s product lines are liquid water
enhancer (“LWE”) products that Petitioner manufactures and sells in packaging of its own patented design (protected by U.S. Patent No. D720,622). Petitioner has also developed an innovative process for
forming defect-free sealing areas in LWE containers
and other blow-molded vessels. That process is described in U.S. Patent 6Pub. No. 2015/0096996 A1
(available at uspto.gov). Petitioner’s founder and
CEO, Teodor Gelov, is a graduate of Purdue University and is the sole inventor of both the packaging
protected by the above-identified design patent and
the process described in the pending patent application. Petitioner practices its innovations through its
manufacturing operations in Indiana.
Respondent is a Delaware corporation that maintains its principal place of business in Northfield, Illinois, which is a suburb of Chicago. Respondent sells
LWE products in competition with Petitioner in multiple states of the United States, including Indiana.
In 2014, Respondent sued Petitioner for patent
infringement; the Respondent chose the United
States District Court for the District of Delaware as
the forum for suit. Respondent originally alleged infringement of three patents, but all claims involving
two of the three patents have now been dismissed.
The sole patent remaining in the litigation is U.S.
6
The United States Patent and Trademark Office (“PTO”) has
issued a “Notice of Allowance” on the cited published patent
application, meaning that a patent will issue to Petitioner for
its manufacturing process in due course.
18
Patent No. 8,603,557 (the “’557 Patent”), which discloses and claims certain packaged flavored liquid
beverage concentrates.
Key witnesses having knowledge of facts relevant
to the validity of the ’557 Patent, including individuals who gave and presented affidavits that overcame
a PTO Examiner’s rejection based on 35 U.S.C.
§ 103(a), are located in the greater Chicago area. The
accused LWE products were designed and are manufactured by Petitioner in Indiana. The overwhelming
majority of Respondent’s infringement claims arise
from non-Delaware activity. In the year preceding
the filing of this suit, approximately 2% of Petitioner’s packaged LWE sales were drop-shipped by common carrier to destinations in Delaware on the instructions of a customer based in Arkansas.
Petitioner moved to dismiss or transfer this action under 28 U.S.C. § 1406. Petitioner argued that
(i) the District of Delaware was not “the judicial district where the defendant resides” within the meaning of 28 U.S.C. § 1400(b); and (ii) insofar as the VE
Holding decision suggested otherwise, it was subordinate to controlling precedents of this Court and in
any event, the 2011 Act had repealed the statutory
language that VE Holding had relied on to justify its
departure from this Court’s interpretation of
§ 1400(b).
The district court denied Petitioner’s motion, considering itself bound by VE Holding. Pet. App. 16a.
Petitioner then timely petitioned the Federal Circuit
for a writ of mandamus under 28 U.S.C. § 1651. Cf.
Atl. Marine Constr. Co. v. U.S. Dist. Court for W.
Dist. of Tex., 134 S. Ct. 568 (2013) (reviewing venue
issue on mandamus review). The Federal Circuit
denied the petition for mandamus. Its opinion stated
in part:
The venue statute was amended in 1988 and
in VE Holding, this court held that those
amendments rendered the statutory definition
of corporate residence found in § 1391 applica-
19
ble to patent cases. In VE Holding, we found
that the Supreme Court’s decision in Fourco
with regard to the appropriate definition of
corporate residence for patent cases in the absence of an applicable statute to be no longer
the law because in the 1988 amendments
Congress had made the definition of corporate
residence applicable to patent cases. 28 U.S.C.
§ 1391(c) (1988) (“For the purposes of venue
under this chapter”). In 1988, the common
law definition of corporate residence for patent
cases was superseded by a Congressional one.
Thus, in 2011, there was no established governing Supreme Court common law ruling
which Congress could even arguably have
been codifying in the language “except otherwise provided by law.”
Pet. App. 6a–7a.
Petitioner timely sought a writ of certiorari,
which this Court granted on December 14, 2016. After this Court’s grant of certiorari, the district court
postponed the start of any trial of this action to October 16, 2017, noting: “[I]f the case is to be transferred, the transferee judge will be free to schedule
trial for whenever he or she wishes.” Dist. Ct. Docket Item 433 at 6 & n.6.
SUMMARY OF THE ARGUMENT
This is an extraordinary case because it presents
a question of statutory interpretation that this Court
specifically answered more than a half century ago.
Under this Court’s authoritative interpretation,
the statutory phrase “the judicial district where the
defendant resides” in 28 U.S.C. § 1400(b) “mean[s]
the state of incorporation only,” and the venue prescribed in § 1400(b) is “not to be supplemented by the
provisions of 28 U.S.C. § 1391(c).” Fourco Glass Co.
v. Transmirra Prods. Corp., 353 U.S. 222, 226, 229
(1957). Since that interpretation, Congress has not
changed one letter in § 1400(b).
20
This Court’s interpretation of § 1400(b) is correct
and should be reaffirmed because (i) it preserves the
original meaning the patent venue statute as enacted by Congress; (ii) it makes sense of the structure of
the statute; and (iii) it fully accords with this Court’s
canons of statutory construction. Fourco’s interpretation of § 1400(b) is also fully consistent with the
current version of the general venue statute, 28
U.S.C. § 1391, which now begins with an express
statement that its provisions apply “[e]xcept as otherwise provided by law.” 28 U.S.C. § 1391(a).
The contrary interpretation of § 1400(b) applied
below rests on repealed statutory language and precedent of a single court of appeals rejecting Fourco—
sources that would not ordinarily be considered adequate to justify rejection of this Court’s longstanding
interpretation of a federal statute. Nevertheless,
Part I below demonstrates that, even under previously existing statutory law, the Federal Circuit
erred in rejecting this Court’s interpretation of
§ 1400(b) and in holding that the venue prescribed in
the statute was to be supplemented by § 1391(c).
The Federal Circuit’s revisionist interpretation of
§ 1400(b) was wrong at the time it was announced
because (i) it abandoned the original meaning of the
statute and undermined the statute’s structure in
almost all cases; (ii) it violated multiple canons of
statutory construction; and (iii) it brought back the
very abuses that Congress had sought to address
and, prior to the Federal Circuit’s reinterpretation,
had effectively addressed in the patent venue statute.
Furthermore, and notwithstanding the Federal
Circuit’s precedent, both this Court and Congress
have taken steps suggesting that the interpretation
of § 1400(b) announced in Fourco remains good law.
This Court has continued to cite the Fourco decision
as if it were still good law, and Congress has enacted
legislation that would have little or no operative
force if the Federal Circuit’s reinterpretation of
§ 1400(b) were correct.
21
As discussed in Part II, however, even if the Federal Circuit’s reinterpretation of § 1400(b) were plausible prior to the 2011 Act (and it was not), that interpretation would not survive the repeal of the statutory language on which the court based its reasoning. Under this Court’s precedents, the Federal Circuit’s reinterpretation of § 1400(b) was never settled
because “[a] question arising in regard to the construction of a statute of the United States concerning
patents for inventions cannot be regarded as judicially settled when it has not been so settled by the
highest judicial authority which can pass upon the
question.” Andrews v. Hovey, 124 U.S. 694, 716
(1888).
The Court should decide this case based on currently in force statutory law and this Court’s precedents that remain binding and not overruled. Current 28 U.S.C. § 1391(a) expressly preserves specially targeted, restrictive venue rules like the one in
§ 1400(b). Fourco’s interpretation of § 1400(b) is
clearly correct under current law.
ARGUMENT
I.
THE FEDERAL CIRCUIT IMPROPERLY
REJECTED THIS COURT’S SETTLED
INTERPRETATION OF 28 U.S.C. § 1400(b).
This Court’s interpretation of § 1400(b) in Fourco
was thoroughly and correctly grounded in the text,
structure, and history of the patent venue statute.
The Federal Circuit was wrong to cast aside that interpretation based on (since repealed) changes made
to § 1391(c) in 1988.
A. The Enactment and the Original
Meaning of the Patent Venue Statute.
The patent venue statute was originally enacted
in 1897, not as a part of general venue legislation but
as a targeted, two-sentence statute designed “to define the exact jurisdiction of the federal courts in actions to enforce patent rights,” Stonite, 315 U.S. at
565, “to define the exact limits of venue in patent in-
22
fringement suits,” id. at 566, and “to eliminate the
‘abuses engendered’ by previous venue provisions allowing such suits to be brought in any district in
which the defendant could be served,” Schnell, 365
U.S. at 262 (quoting Stonite, 315 U.S. at 563).
The two sentences in the statute—one devoted to
venue and the other to service of process—formed an
integrated whole that not only defined the districts
in which plaintiffs could bring suit but also gave
plaintiffs a federal right to serve a summons on
agents of defendants that had a regular and established place of business but were not resident in the
forum district. Thus, while the statute limited patent plaintiffs’ venue choices, it also afforded them
federal process so that they could bring patent infringement lawsuits against non-resident defendants
and obtain relief on claims for alleged infringement
arising outside of the forum state without having to
depend on the uncertainty of state service of process
laws. 7
The statute afforded plaintiffs two options for
proper venue. The first option was to sue in “the district of which the defendant is an inhabitant.” 29
Stat. at 695. The second was to sue “in any district
in which the defendant, whether a person, partnership, or corporation, shall [i] have committed acts of
infringement and [ii] have a regular and established
place of business.” Id.
At the time the patent venue statute was enacted,
it was undoubtedly true that corporate entities were
7
Each act of alleged infringement gives rise to a discrete claim.
Cf. Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962,
1969 (2014) (stating principle in copyright context); Hazelquist
v. Guchi Moochie Tackle Co., 437 F.3d 1178, 1180 (Fed. Cir.
2006) (“Our case law clearly states that each act of patent infringement gives rise to a separate cause of action.”).
23
viewed as being residents or inhabitants of only their
state of incorporation. Shaw, 145 U.S. at 450 (1892)
(“[T]he domicil, the habitat, the residence, the citizenship of the corporation can only be in the State by
which it was created, although it may do business in
other States whose laws permit it.”). The original
meaning of corporate inhabitance or residence is also
clearly evident in the statutory text and structure.
The statute refers to “the” district of inhabitancy
(thus suggesting inhabitancy is in a singular place)
but to “any” district in which the defendant might
have a regular and established place of business.
The narrowness of the original meaning is also evident from the two options for obtaining venue: If
having a regular and established place of business
made a corporation an inhabitant, then the second
option for venue would add nothing to the first option
for obtaining venue over corporate defendants. Yet
the statute expressly lists “corporation[s]” as among
the defendant entities that are covered under the
second option. 29 Stat. at 695.
Targeted as it was just to patent infringement litigation, the 1897 Act was not general legislation, but
a very specific piece of legislation. Within the realm
of patent infringement litigation, however, the statute was expressly designed to apply not just to natural persons, but “to all defendants in a particular
type of actions, i.e., patent infringement actions.”
Fourco, 353 U.S. at 228 (emphasis in original).
After enacting the patent venue statute in 1897,
Congress has never substantively altered the statute. Rather, small word changes were made in the
1911 and 1948 codifications, and such changes made
during recodification efforts are generally presumed
not to be substantive changes in law. Fourco, 353
U.S. at 227.
24
B. This Court’s Interpretation of the Patent Venue Statute and the Federal Circuit’s Revisionist Reinterpretation.
By the time of Fourco, this Court had already
concluded that “Congress did not intend the Act of
1897 to dovetail with the general provisions relating
to the venue of civil suits, but rather that it alone
should control venue in patent infringement proceedings.” Stonite, 315 U.S. at 566. Fourco merely continued that interpretative approach by holding that
the specific statute was not altered by the later enacted general venue statute. As this Court noted in
Pure Oil, “Fourco, after determining that the 1948
revision of § 1400(b) was meant to introduce no substantive change in the provision, was merely following the purpose and letter of the original enactment.”
384 U.S. at 207.
The Federal Circuit in VE Holding rejected Fourco’s interpretation of § 1400(b), but the court made
three errors that are evident if the court’s opinion is
compared to then-existing precedents of this Court.
First, the Federal Circuit asserted that the issue
in the case was wholly new—indeed, a matter of
“first impression,” 917 F.2d at 1579—because
§ 1391(c) “now [had] exact and classic language of
incorporation: ‘For purposes of venue under this
chapter . . . .’” Id. The court repeatedly referred to
the language in § 1391(c) as “clear.” Id. at 1578,
1579, 1580, 1581.
Yet the apparent clarity of § 1391(c)’s language of
incorporation was nothing new. The lower court in
Fourco had also viewed the meaning of the pre-1988
version of § 1391(c) as “plain” and thought that it required § 1391(c)’s definition of residence “to be incorporated into other sections of the venue chapter.”
Transmirra Prods. Corp. v. Fourco Glass Co., 233
F.2d 885, 886 (2d Cir. 1956), rev’d, 353 U.S. 222
(1957).
This Court in Fourco had specifically responded
to the “clear” language argument, stating that “[t]he
25
question is not whether § 1391(c) is clear and general, but, rather, it is, pointedly, whether § 1391(c)
supplements § 1400(b), or, in other words, whether
the latter is complete, independent and alone controlling in its sphere as was held in Stonite, or is, in
some measure, dependent for its force upon the former.” 353 U.S. at 228. The Federal Circuit was thus
wrong to think that apparent clarity of the language
in § 1391(c) created a matter of “first impression.”
Second, the Federal Circuit incorrectly believed
that the corporate “residence” provision in the pre1988 version of § 1391(c) was “surplusage” or “at best
confusing.” VE Holding, 917 F.2d at 1578. By disparaging the effect of the residence clause in the pre1988 version of the statute, the Federal Circuit freed
itself to assert that the 1988
change was much more
important than it was. 8 But the corporate “residence” clause of § 1391(c) at the time of Fourco, “such
judicial district shall be regarded as the residence of
such corporation for venue purposes” (emphasis added), was at least as broad as it was after the 1988
amendment of that section. Indeed, this Court had
already held that, where a special venue statute
lacked the “contrary restrictive indications” such as
those evident in § 1400(b), the corporate residence
provision in pre-1988 § 1391(c) did supplement the
special statute. Pure Oil, 384 U.S. at 205.
Third, the Federal Circuit ignored that Fourco
quoted the statutory heading of § 1391 (“Venue generally”), 353 U.S. at 223, and ultimately interpreted
8
The 1988 Act also added a new second sentence to § 1391(c)
which restricted venue in multi-district states. The Federal
Circuit did not rely on that sentence for its holding. See 917
F.2d at 1578 (noting that the second sentence in the 1988 version of § 1391(c) “is not at issue in this case”).
26
§ 1391(c) not to be unclear, but instead to be “a general corporation venue statute, whereas § 1400(b) is
a special venue statute applicable, specifically, to all
defendants in a particular type of actions, i.e., patent
infringement actions.” Id. at 228 (emphasis in original). Fourco specifically invoked the standard canon
of statutory construction that the specific should control over the general. See id. at 228–29. At the time
of VE Holding, the statutory title of § 1391 as “Venue
generally” had not changed, and nothing about
§ 1400(b) had changed.
Thus, the specificcontrolling-the-general canon was just as applicable
after 1988 as it had been when this Court decided
Fourco.
C. The Federal Circuit’s Reinterpretation of
§ 1400(b) Violates Multiple Canons of Statutory Construction.
The Federal Circuit’s rejection of this Court’s interpretation of § 1400(b) violated at least three of
this Court’s canons of statutory construction. Charitably viewed, the issue in VE Holding was whether
the meaning of a specific statute (§ 1400(b)) should
be controlled by a later amendment to a general
statute (§ 1391(c)). There is law on this issue, and it
was not applied by the Federal Circuit.
“It is a basic principle of statutory construction
that a statute dealing with a narrow, precise, and
specific subject is not submerged by a later enacted
statute covering a more generalized spectrum.”
Radzanower v. Touche Ross & Co., 426 U.S. 148, 153
(1976). “Where there is no clear intention otherwise,
a specific statute will not be controlled or nullified by
a general one, regardless of the priority of enactment.” Id. (emphasis added) (quoting Morton v.
Mancari, 417 U.S. 535, 550–51 (1974)).
The Court in Radzanower explained the “reason
and philosophy” of this rule:
The reason and philosophy of the rule is, that
when the mind of the legislator has been
turned to the details of a subject, and he has
27
acted upon it, a subsequent statute in general
terms, or treating the subject in a general
manner, and not expressly contradicting the
original act, shall not be considered as intended to affect the more particular or positive
previous provisions, unless it is absolutely
necessary to give the latter act such a construction, in order that its words shall have
any meaning at all.
Id. (quoting Theodore Sedgwick, The Interpretation
and Construction of Statutory and Constitutional
Law 98 (2d ed. 1874)). This Court’s teachings in
Radzanower are relevant not merely for the canon
articulated there, but also for specific application of
that canon to venue statutes.
In Radzanower, the Court confronted a venue
question that was similar to the venue question presented in Fourco and in this case. There, as here and
as in Fourco, an earlier special venue statute limited
where civil actions could be brought against a certain
class of defendants (in Radzanower, the special venue statute limited where national banks could be
sued). Id. at 149–50. In Radzanower, as here and as
in Fourco¸ a plaintiff contended that a defendant was
subject to suit in a certain district under a subsequently enacted, more general statute prescribing
where certain types of suits could be brought (namely, § 27 of the Securities Exchange Act of 1934, 42
Stat. 902, 15 U.S.C. § 78aa, authorizing suits for securities fraud), notwithstanding the contrary provisions of a special venue statute (which Radzanower
restricted where national banks could be sued). See
id. at 150–51. And in Radzanower, as in Fourco, this
Court held that the special venue statute took precedence over the more general statute, because there
was no “clear intention” to provide “otherwise” for
venue with respect to the class of defendants that
were protected by the more specific venue statute.
28
Id. at 154–56. In reaching that result, Radzanower
cited9 and followed the reasoning of Fourco. See id. at
154.
As in Radzanower and Fourco, here there is no
“irreconcilable conflict” between the restrictive provisions of 28 U.S.C. § 1400(b) and the general provisions of 28 U.S.C. § 1391(c), “in the sense that there
is a positive repugnancy between them or that they
cannot mutually coexist.” 426 U.S. at 155. Not only
is there no “irreconcilable conflict,” but there is no
conflict whatsoever between the provisions of current
28 U.S.C. § 1391 and the provisions of 28 U.S.C.
§ 1400(b) as construed in Fourco.
VE Holding also departed from the canon that:
“The normal rule of statutory construction is that if
Congress intends for legislation to change the interpretation of a judicially created concept, it makes
that intent specific.” Midlantic Nat’l Bank v. N.J.
Dep’t of Envtl. Prot., 474 U.S. 494, 501 (1986). That
canon promotes stability in the law and can be seen
as a close cousin to stare decisis. To be sure, the
canon is not entirely identical to stare decisis, for it
addresses the situation where one statute has been
authoritatively construed judicially (§ 1400(b)) but
another statute (§ 1391(c)) has been amended. Justice Scalia and a co-author provide a lucid explanation:
What if the earlier ambiguous provision has
already been construed by the jurisdiction’s
high court to have a meaning that does not fit
9
The sole dissenting Justice in Radzanower (Justice Stevens)
did not object to the Court’s teaching that a specific venue statute should control over a general. Rather, he dissented because
he viewed both as special venue statutes, and he noted that
“[n]either party relies on the general venue provision in 28
U.S.C. § 1391.” Id. at 159 (Stevens, J., dissenting).
29
as well with a later statute as another meaning? Stare decisis is not an insuperable obstacle to giving effect to the implication of the later statute; it is, after all, a new total law (or a
new corpus juris) to which the tools of construction are being applied. A clear, authoritative judicial holding on the meaning of a
particular provision should not be cast in
doubt and subjected to challenge whenever a
related though not utterly inconsistent provision is adopted in the same statute or even in
an affiliated statute. Legislative revision of
law clearly established by judicial opinion
ought to be by express language or by unavoidably implied construction.
Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts 331 (2012).
Applying that interpretative approach in VE
Holding would have led to preservation, rather than
rejection, of this Court’s interpretation of § 1400(b).
By 1988, this Court’s construction of § 1400(b) as being “the sole and exclusive provision controlling venue in patent infringement actions,” 353 U.S. at 229,
as “not to be supplemented by the provisions of 28
U.S.C. § 1391(c),” id., and as placing “patent infringement cases in a class by themselves, outside
the scope of general venue legislation,” Brunette, 406
U.S. at 713, had stood as settled law of the land for
decades. Moreover, this Court had already addressed the relationship between § 1400(b) and
§ 1391(c). In such circumstances, the established
construction of § 1400(b) could not rightly be cast
aside on the basis of a speculative inference that the
minor 1988 language change in § 1391(c) purportedly
meant (i) to effect a major change in the patent venue statute, (ii) to strip domestic corporate defendants
of patent venue protections that had existed for more
than ninety years between 1897 and 1990, and (iii) to
overrule multiple decisions of this Court—all without
any express language commanding such disruption
30
and without a word of legislative commentary that
any such major change was intended.
It is perhaps overkill to mention that, not only
was the 1988 amendment of § 1391(c) unaccompanied by any contemporaneous statement that
§ 1400(b) was being radically changed, but this Court
has continued to view the patent venue statute to be
controlled by Fourco, rather than the Federal Circuit’s decision in VE Holding. See Cortez Byrd
Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193,
204 (2000) (citing Fourco to support the view that
“Congress had a restrictive intent as to venue in patent cases”); Atl. Marine Constr. Co. v. U.S. Dist.
Court for W. Dist. of Tex., 134 S. Ct. 568, 577 n.2
(2013) (stating that “Section 1391 governs ‘venue
generally,’ that is, in cases where a more specific
venue provision does not apply” and citing 28 U.S.C.
§ 1400 as “identifying proper venue for copyright and
patent suits”).
In enacting legislation, Congress too has acted in
a way that is nearly impossible to explain unless it
also views as good law this Court’s decision in Fourco
rather than VE Holding. Just prior to its 2011
amendments to § 1391(c)), Congress enacted a special provision governing whether ATM machines
should be viewed as “regular and established” places
of business “for purposes of section 1400(b)”:
(c) In an action for infringement under section
281 of title 35, United States Code, of a covered business method patent, an automated
teller machine shall not be deemed to be a
regular and established place of business for
purposes of section 1400(b) of title 28, United
States Code.
Leahy-Smith America Invents Act, Pub. L. No. 11229, § 18(c), 125 Stat. 284, 331 (2011) (reproduced in
note to 35 U.S.C. § 321 (2012)).
The above-quoted provision makes no sense unless Fourco remains good law; for if VE Holding were
correct, a corporate owner of an ATM would be
31
deemed to “reside” wherever the machine’s use or
operation infringed a patent, and it would make no
difference whether the machine was deemed to be “a
regular and established place of business” for purposes of 28 U.S.C. § 1400(b). The provision would
have applicability only to individuals who personally
own ATM machines, who operate their ATM machines outside the judicial districts of their personal
residence, and who are sued for patent infringement.
It is unclear whether any such individuals exist.
VE Holding also departed from a third canon of
statutory construction, to wit, the principle that
Congress “does not, one might say, hide elephants in
mouseholes.” Whitman v. Am. Trucking Ass’ns, 531
U.S. 457, 468 (2001). VE Holding somehow found a
huge elephant—indeed, a revolution in patent venue,
overturning more than 90 years of stable law—
lurking in the smallest of mouseholes—an enactment
that was not amending the patent venue statute;
that was expressly labeled as “Miscellaneous” in the
text of the legislation; and that was described in the
legislative history as “dealing with relatively minor
discrete proposals.” H.R. REP. NO. 100-889, at 66
(1988), as reprinted in 1988 U.S.C.C.A.N. 5982,
6027. And the revolution in patent venue law was
found in a mousehole in a statute that this Court had
previously instructed was not to be used in determining patent venue.
D. The Federal Circuit’s Reinterpretation of
§ 1400(b) Undermines the Statutory Structure.
The Federal Circuit’s reinterpretation of
§ 1400(b) has essentially gutted the entire statutory
structure of the 1897 Act of Congress. For corporate
defendants (which are the vast majority of all patent
infringement defendants), the patent venue statute
is a dead letter. Under the rule in VE Holding, ven-
32
ue under § 1400(b) is permissible in “any district
where there would be personal jurisdiction
over the
corporate defendant.” 917 F.2d at 1583. 10
The meaning of the word “resides” in § 1400(b) is
informed by 28 U.S.C. § 1694 and the canon in pari
materia, under which “statutes relat[ing] to the same
thing . . . are to be taken together, as if they were one
law.” United States v. Freeman, 44 U.S. 556, 564
(1845). This canon clearly applies to 28 U.S.C.
§ 1400(b) and § 1694, which were originally one law
(enacted as the first and second sentences of the
1897 Act, see 29 Stat. at 695–96) and which use the
terms “resides” and “resident” in ways that confirm
Fourco’s construction of § 1400(b).
28 U.S.C. § 1694 authorizes service of process in
patent infringement actions commenced “in a district
where the defendant is not a resident but has a regular and established place of business” (emphasis
added). As construed in Fourco, the word “resides”
in § 1400(b) connotes the same domiciliary relation
between a defendant and a judicial district as does
the word “resident” in § 1694. In the context of
§ 1694, there is no question but that the term “resident” is “synonymous” with “inhabitant,” and “those
synonymous words mean domicile, and, in respect of
corporations, mean the state of incorporation only.”
Fourco, 353 U.S. at 226 (emphasis in original). Sec10
As set forth more fully infra, the Federal Circuit has taken
an extremely expansive view of state authority to exercise extraterritorial personal jurisdiction. See Beverly Hills Fan Co. v.
Royal Sovereign Corp., 21 F.3d 1558, 1568 (Fed. Cir. 1994)
(“Beverly will be able to seek redress in Virginia for sales of the
accused fan to consumers in these other states.”). These theories have enabled patent plaintiffs to circumvent the territorial
limits of 28 U.S.C. § 1694 and bring back the “abuses” that the
patent venue statute was enacted to remedy. Schnell, 365 U.S.
at 262 (quoting Stonite, 315 U.S. at 563).
33
tion 1694 is not a venue statute, and even under the
reasoning of VE Holding, was not changed by the
1988 amendments to § 1391(c).
But under the Federal Circuit’s reinterpretation
of § 1400(b), the term “resides” in § 1400(b) purportedly has a very different meaning than does the term
“resident” in § 1694. Under the Federal Circuit’s reinterpretation, a judicial district can purportedly be
one in which a domestic corporate defendant simultaneously “resides” (§ 1400(b)) but “is not a resident”
(§ 1694). Adherence to the original meaning of “resides” in § 1400(b) avoids this anomalous result.
The meaning of the word “resides” in § 1400(b) is
also informed by the statute’s separate provision of
venue, “where the defendant has committed acts of
infringement and has a regular and established place
of business.” Under the Federal Circuit’s reinterpretation of § 1400(b), a domestic corporate defendant is “deemed” to reside in any district where it is
subject to personal jurisdiction, and the presence or
absence of “a regular and established place of business” is irrelevant—as this case illustrates. A statute ought not be construed “in a manner that renders
it ‘entirely superfluous in all but the most unusual
circumstances.’” Roberts v. Sea-Land Servs., Inc.,
132 S. Ct. 1350, 1358 (2012) (quoting TRW Inc. v.
Andrews, 534 U.S. 19, 29 (2001)).
It is no accident that “Congress had a restrictive
intent as to venue in patent cases,” Cortez Byrd, 529
U.S. at 204, and acted “to define the exact jurisdiction of the . . . courts in these matters,” Schnell, 365
U.S. at 262 (quoting Stonite, 315 U.S. at 565 n.5).
Although patent infringement “is essentially a tort,”
Carbice Corp. of Am. v. Am. Patents Dev. Corp., 283
U.S. 27, 33 (1931), it is a tort that differs in important respects from other torts that federal courts
are called upon to remedy. Acts that may constitute
patent infringement can occur thousands of miles
away from a patentee, without the actor being aware
of a patent’s or a patentee’s existence, and without
either the patentee or the actor being aware that any
34
invasion of rights has occurred. “Direct infringement
is a strict-liability offense.” Commil USA, LLC v.
Cisco Sys., Inc., 135 S. Ct. 1920, 1926 (2015).
Injury from patent infringement can be characterized as occurring thousands of miles away from a patentee or from where a defendant develops products
whose later use or sale may constitute patent infringement. See, e.g., N. Am. Philips Corp. v. Am.
Vending Sales, Inc., 35 F.3d 1576, 1578–80 (Fed. Cir.
1994) (holding that corporate plaintiffs domiciled in
Delaware and New Hampshire suffered injury in Illinois by reason of alleged acts of infringement committed in Illinois).
Because the Federal Circuit’s interpretation of
§ 1400(b) encourages plaintiffs to sue defendants in
districts not covered by the federal service of process
statute, there is now a gap between the reach of
§ 1400(b) (very broad) and the reach of the federal
service of process statute § 1694 (still its original
scope). As this case illustrates, plaintiffs relying on
VE Holding typically invoke Federal Rule of Civil
Procedure 4(k)(1)(A) and state “long-arm”
statutes to
start patent infringement actions. 11 But such stat11
Federal Rule of Civil Procedure 4(k)(1)(A) provides in part:
“Serving a summons . . . establishes personal jurisdiction over a
defendant: (A) who is subject to the jurisdiction of a court of
general jurisdiction in the state where the district court is located.” Delaware Code section 3104(c), in turn, provides in
part: “As to a cause of action brought by any person arising
from any of the acts enumerated in this section, a court may
exercise personal jurisdiction over any nonresident . . . who in
person or through an agent . . . [c]auses tortious injury . . . outside of the State by an act or omission outside the State if the
person regularly does or solicits business, engages in any other
persistent course of conduct in the State or derives substantial
revenue from services, or things used or consumed in the
State.” The basis of extraterritorial personal jurisdiction prescribed in the Delaware “long-arm” statute is similar to that of
Footnote continued
35
utes (unlike a federal service of process statute) are
subject to constitutional limits based on a defendant’s contacts with the forum state (i.e., the relevant
sovereign authorizing service). The constitutional
limits on state service of process, however, create a
problem for plaintiffs: absent a basis for general personal jurisdiction, a plaintiff cannot seek relief for
infringements committed outside the forum state unless the plaintiff can invoke a very
expansive theory
of specific personal jurisdiction. 12
The Federal Circuit has been developing broad
theories of specific personal jurisdiction to fill the
gap caused by the divergence between the scope of
§ 1694 and the expanded scope of venue under VE
Holding. Under Federal Circuit precedent, states
are said to have broad authority to regulate the conduct of non-residents that commit allegedly infringing acts outside the forum state causing injury outside the forum state. See Beverly Hills, 21 F.3d at
1568 (allowing the plaintiff-patentee “to seek redress
Footnote continued from previous page
the North Carolina “long-arm” statute that this Court held in
Goodyear Dunlop Tires Operations S.A. v. Brown, 564 U.S. 915,
926–27 & n.4 (2011) was insufficient to establish personal jurisdiction with respect to allegedly tortious conduct committed
outside of North Carolina and causing injury outside the state.
The decision below rests on a theory of personal jurisdiction
that is similar to the one being reviewed this Term in BristolMyers Squibb Co. v. Superior Court of California, No. 16-466.
12
Except where a defendant is “at home” in a state, Goodyear,
564 U.S. at 929, a state’s constitutional authority to require a
non-resident to appear and defend a claim is limited to claims
that arise from “an ‘activity or an occurrence that takes place in
the forum State.’” Walden v. Fiore, 134 S. Ct. 1115, 1121 n.6
(2014) (quoting Goodyear, 564 U.S. at 919).
36
in Virginia for sales of the accused fan to consumers
in these other states”). In this case, for example, the
Respondent does not complain merely of alleged infringement in Delaware, but asserts claims based on
activity in Indiana, California, and other nonDelaware locations on the basis of a Delaware “longarm” statute that prescribes a purported basis for
extraterritorial personal jurisdiction (see supra note
11).
Returning to this Court’s interpretation of
§ 1400(b) would mean that non-consenting domestic
corporate defendants 13 would be subject to suit for
patent infringement only in those judicial districts
that § 1400(b) specifies, with the terms “resides” and
“resident” in §§ 1400(b) and 1694 both referring to a
defendant’s domicile, which in the case of a corporate
defendant means “the state of incorporation only.”
Fourco, 353 U.S. at 226. In those districts, the federal statute 28 U.S.C. § 1694 authorizes service of a
summons on a non-resident defendant’s agents and
thereby establishes specific jurisdiction on a nationwide basis in the manner specifically authorized by
Congress. In short, returning to this Court’s interpretation of § 1400(b) would reestablish the system
Congress authorized and eliminate the incentive for
the Federal Circuit to develop expansive theories of
personal jurisdiction.
13
Section 1400(b) confers a venue privilege that “may be
waived.” Marvel, 287 U.S. at 435 (rejecting venue challenge).
Enforcing the original understanding of § 1400(b) would not
limit patent venue where, as in the Marvel case, a defendant
has voluntarily submitted itself to suit for patent infringement
in a judicial district. Section 1400(b) also has no application to
alien defendants. See Brunette, 406 U.S. at 714.
37
E. The Federal Circuit’s Reinterpretation of
§ 1400(b) Has Brought Back the Very “Abuses”
That Congress Sought to Avoid.
Because injury from alleged patent infringement
can be said to occur thousands of miles away from a
patentee or from where a defendant develops accused
products, the Federal Circuit’s reinterpretation of §
1400(b) has rendered patent plaintiffs uniquely able
to file suit in districts chosen for their geographical
remoteness from a defendant and for local norms and
practices that tend to favor patent plaintiffs in various ways. The elimination of venue protections has
thus led to serious abuses, even though Congress enacted § 1400(b) precisely to prevent such abuses of
nationwide venue in patent infringement litigation.
In amicus curiae briefs filed in support of the petition stage of this case, amici reported that the Federal Circuit’s revisionist interpretation of § 1400(b)
has:
• Resulted in “rampant and unseemly
forum shopping” that “hampers innovation, generates erroneous results, and undermines respect for
the rule of law.” Brief of Amici Dell
Inc. and the Software & Information
Industry Association at 3, 6.
• “[L]ed to pervasive forum shopping”
that “has fundamentally altered the
landscape of patent litigation in
ways detrimental to the patent system as a whole.” Brief of Amici 32
Internet Companies, Retailers, and
Associations at 3, 17 (citation omitted).
• Produced “a massive imbalance in
the distribution of patent suits in the
United States” that undermines
“core purposes underlying our patent
laws.” Brief of Amici American
Bankers Association, the Clearing
38
•
House Payments Company L.L.C.,
Financial Services Roundtable and
Consumer Bankers Association at 8–
9.
Engendered abusive “forum shopping [of] the very sort” that “Congress sought to guard against when
it adopted legislation limiting venue
in patent litigation.” Brief of Amicus
Washington Legal Foundation at 14.
Generated a “venue free-for-all” that
“especially harms small companies
and American consumers” and that
“may be drawing courts into competition to attract patent owners—the
ones with unilateral choice over forum—by adopting practices and procedures favorable to patent owners.”
Brief of Amici the Electronic Frontier
Foundation
and
Public
Knowledge at 3, 21.
• “[F]undamentally shaped the landscape of patent litigation in ways
that harm the patent system, by enabling extensive forum shopping and
forum selling.” Brief of Amici 56
Professors of Law and Economics at
12.
• “[C]reated numerous practical negative consequences” including “concentration of most patent litigation
[in] a select few district courts,
which is bad for positive development of patent law.” Brief of Amicus
Paul R. Michel (retired Chief Judge
of the Federal Circuit) at 1.
To curb many of these abuses, this Court need
merely accord the patent venue statute the original
and plain meaning it had (i) at the time of its original enactment in 1897, (ii) at the time of its re•
39
enactment in the 1911 Judicial Code, (iii) at the time
of its codification in the 1948, and (iv) at the multiple
times this Court has applied or referred to its longestablished construction of § 1400(b) in cases such as
Cortez Byrd, 529 U.S. at 204, Radzanower, 426 U.S.
at 153–58, Brunette, 406 U.S. at 713, Pure Oil, 384
U.S. at 207, Schnell, 365 U.S. at 262, and Fourco,
353 U.S. at 228–29.
II. UNDER THE CURRENT VERSION OF § 1391,
FOURCO IS CLEARLY CORRECT.
In 2011, Congress rewrote § 1391 and repealed
the statutory language in the 1988 version of
§ 1391(c) that VE Holding and the decision below
treated as having changed the meaning of 28 U.S.C.
§ 1400(b). The 2011 Act also created a new 28 U.S.C.
§ 1391(a), titled “Applicability of Section,” which
reads in pertinent part: “Except as otherwise provided by law—(1) this section shall govern the venue of
all civil actions brought in district courts of the United States . . . .” (emphasis added). The text of current 28 U.S.C. § 1391 makes the question presented
in this case even easier to resolve than it was at the
time of Fourco because § 1391 then lacked
any harmonizing provision like current § 1391(a). 14
14
The sole legislative report on the 2011 Act—House Report
No. 112-10—states that “[n]ew paragraph 1391(a)(1) would follow current law in providing the general requirements for venue choices, but would not displace the special venue rules that
govern under particular Federal statutes.” H.R. REP. NO. 11210, at 18 (2011). As construed in Fourco, 28 U.S.C. § 1400(b)
prescribes a “special” venue rule that governs patent cases. Cf.
Pure Oil, 384 U.S. at 207 (holding that “in contrast to the situation dealt with in Fourco, the basic intent of the Congress is
best furthered by carrying the broader residence definition of
§ 1391(c) into the Jones Act”).
40
The decision below rejects the 2011 Act as a basis
for following this Court’s interpretation of § 1400(b)
in Fourco on two grounds, neither of which has merit. First, the decision below characterizes Fourco as
having announced “federal common law” and, as
such, was not a type of “law” referred to by the
phrase “except as otherwise provided by law” in current § 1391(a). Pet. App. 6a–7a. In fact, Fourco construed the meaning of statutory language. The proper meaning of the phrase, “the judicial district in
which the defendant resides,” 28 U.S.C. § 1400(b), is
not a matter of “federal common law,” but rather is a
matter of construing the meaning of “resides” and
“resident” in 28 U.S.C. §§ 1400(b) and 1694 in a
manner that preserves the original meaning of the
language and the balanced, integrated scheme for
directing the filing of patent infringement suits as
those two provisions prescribe.
The decision below alternatively holds that, even
if case law interpreting a statute is “law” within the
meaning of the phrase, “[e]xcept as otherwise provided by law” in 28 U.S.C. § 1391 (2012), the relevant
case “law” that existed at the time of the 2011 Act
was not the law stated by this Court in Fourco, but
rather the law stated by the Federal Circuit in its VE
Holding decision. The decision below states: “Even
if Congress’ 2011 amendments were meant to capture existing federal common law, . . . Fourco was not
and is not the prevailing law that would have been
captured. We reject [Petitioner’s] argument that in
2011 Congress codified the common law regarding
venue in patent suits as described in Fourco.” Pet.
App. 8a.
In support of that last conclusion, the court below cited three scattered legislative reports that purportedly “recognized that VE Holding is the prevailing law.” Id. Not one of those legislative reports was
associated with Congress’s 2011 amendments to
§ 1391. Indeed, not one of those reports is even from
the same Congress as the one that enacted the 2011
amendments to § 1391(c).
41
In any event, the Federal Circuit has no authority to depart from precedents of this Court, and it is
thus irrelevant whether a legislative report may
have “recognized that VE Holding is the prevailing
law.” Id. In recent years, this Court has disapproved a number of Federal Circuit precedents that
district courts or legislators might have “recognized”
as “law” until this Court intervened. See Pet. at 27–
28 & n.15.
Furthermore, this Court has already articulated
a view about whether lower court decisions can “judicially settle” a question related to patent law: “A
question arising in regard to the construction of a
statute of the United States concerning patents for
inventions cannot be regarded as judicially settled
when it has not been so settled by the highest judicial authority which can pass upon the question.”
Andrews v. Hovey, 124 U.S. 694, 716 (1888). Recent
decisions of this Court have graphically demonstrated this point. See, e.g., Limelight Networks, Inc. v.
Akamai Techs., Inc., 134 S. Ct. 2111, 2117 (2014)
(“The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent.”); Bilski v. Kappos, 561 U.S. 593, 612 (2010)
(“[N]othing in today’s opinion should be read as endorsing interpretations of § 101 that the Court of
Appeals for the Federal Circuit has used in the
past.”); KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
415 (2007) (“We begin by rejecting the rigid approach
of the Court of Appeals.”).
Section 1400(b) was held in Fourco to prescribe a
special, specific venue rule for patent infringement
actions that falls easily within § 1391(a)’s current
language, “[e]xcept as otherwise provided by law.”
Section 1400(b) plainly is a “law” that “otherwise
provide[s]” for venue rules in patent infringement
actions. Under this Court’s precedents, Fourco’s interpretation of § 1400(b) remained good law in 2011
because it had never been overruled by this Court.
By contrast, in 2011, VE Holding could not be regarded as “judicially settled” because it had not been
42
settled by the highest judicial authority capable of
passing upon the question. In such circumstances,
this Court should preserve its authoritative interpretation, rather than the Federal Circuit’s.
CONCLUSION
The decision below should be reversed and the
case remanded with instructions that venue of this
action is improper in the District of Delaware.
Respectfully submitted,
John F. Duffy
Richard M. Koehl
Emma L. Baratta
Of Counsel
James W. Dabney
Counsel of Record
HUGHES HUBBARD & REED
LLP
One Battery Park Plaza
New York, New York 10004
(212) 837-6000
Attorneys for Petitioner
January 30, 2017
75930743